Market Snapshot, Noon CT (VIP) -- December 18, 2012

Corn futures are mostly 2 to 7 cents lower at midday on spillover from soybeans.

Traders continue to favor the downside as they ready positions ahead of the holiday. Improved precip chances for the Corn Belt and continued lackluster export demand make it difficult for corn to find buyers.

Spillover from soybeans is adding pressure.

But selling interest is being limited by a 2-cent increase in Gulf basis for December and January delivery, while other months were steady to a penny higher. This signals end-users are raising bids to secure supplies before Mississippi River water levels become too low for barge traffic. Basis in St. Louis is up 10 cents today.

Nearby soybean futures continue to post losses in the teens to 20s, while deferred months are seeing lighter losses.

News China canceled 300,000 MT of soybean sales for 2012-13 and that unknown destinations also canceled purchases of 120,000 MT of bean sales for 2012-13 continues to weigh on the bean market.

But this is countered by news unknown destinations bought 110,000 MT of soybeans for 2012-13.

Also, Gulf soybean basis was steady to 2 cents higher for near-term delivery and steady to 20 cents higher for February through March delivery at midday. This reminds the market of strong demand, tight supplies and the fact that the Mississippi River will soon close to barge traffic barring a significant change in weather patterns.

But rain in the forecast for Brazil and snow in the forecast for the Corn Belt are making it difficult for bulls to gain any traction in the corn market.

A weaker U.S. dollar index and improved risk appetite have encouraged light short-covering in wheat.

The market is also benefiting from a reminder of production troubles overseas. The U.K.'s exports for October were down 67% compared to last year.

But bears maintain the advantage in the Chicago and Kansas City wheat markets due to ongoing concerns about lackluster export demand for U.S. supplies, which USDA confirmed in its S&D Report last week.

Also, wheat struggles to rally without support from corn.

The forecast for precip on the Central Plains and Midwest is also making it difficult for wheat to find buyers.

Mostly softer corn prices continue to give bulls an edge in feeder cattle futures, though the fact that corn futures have retraced some of their early losses has reined in gains in feeders.

Friendly outside markets are also supportive of livestock buys.

Lean hog futures have improved to post slight gains across the board.

Lean hog futures are benefiting from cautious optimism pork demand will improve after the holidays, as historically high beef prices may cause consumers to buy more pork.

This helped the pork cutout market to firm slightly yesterday, though movement was unimpressive. Today's total load count looks to be more impressive however, as 26.25 loads have already changed hands this morning.

But buying interest is being limited by a steady to lower cash hog market today as kill hours will be reduced ahead of the holidays and cutting margins are back near breakeven.

Light support comes from uncertainty about how the approaching Midwest winter storm will affect hog marketings.